NitroMed, Watson Pharma, and more

MichaelBaron

Advancers

American Science and Engineering
ASE, +0.00%
shares jumped 12.9 percent after the company won a $23.2 million order from the U.S. government for its X-ray detection technology. The Billerica, Mass.-based company will deliver 24 Backscatter Van ZBV X-ray screening systems. The equipment will include radioactive threat detection technology "to detect nuclear devices and dirty bombs hidden in vehicles or containers."

EFJ
EFJI
shares jumped 11 percent after the company lifted its financial outlook for 2004 to earnings of $4.9 million to $5.5 million, or 26 to 29 cents per share on revenue of between $74 million and $76 million. The Washington-based wireless telecommunications software developer attributed the higher forecast to "increased sales opportunities for homeland security communication products for first responders and international security products." The current average estimate of analysts polled by Thomson First Call is for a profit of 25 cents per share.

Meritage Homes
MTH, -0.11%
shares rose 7.6 percent after the company raised its 2005 diluted earnings per share forecast by 20 percent to between $10.25 to $10.55 over its 2004 outlook of $8.55 to $8.80. It said: "Our 2004 results to date are strong, and our lot position is excellent ... Based on these factors, we anticipate 2005 revenue will approximate $2.2 billion to $2.3 billion, an increase of 16 percent to 21 percent over our expected 2004 revenue of $1.9 billion.

Shares of NitroMed
NTMD
leapt 13.2 percent after the Lexington, Mass., drug company said clinical data from a Phase III trial of its BiDil treatment for heart failure in African Americans would be presented during the annual meeting of the American Heart Association on Nov. 7-10 in New Orleans. As previously disclosed, the significant survival benefit that BiDil showed in the trial prompted its halt in mid-July to allow all of the more than 1,000 participating patients to receive the drug. NitroMed shares have appreciated more than 300 percent since scraping a 52-week low of $5.70 on July 16. See full story.

Shares of Protein Design Labs
PDLI, -3.48%
rose nearly 4 percent after the company announced an agreement with Roche to develop and commercialize PDL's asthma treatment Zenapax. As part of the deal, PDL will receive an upfront payment of $17.5 million, and milestone payments of up to $187.5 million, for Roche's daclizumab for asthma.

Shares of Watson Pharmaceuticals
WPI, -1.19%
added 4.6 percent after Raymond James raised its rating on the generic drug company to "strong buy" from "market perform" and set a price target of $42. The firm was extremely bullish, saying new drugs, cost-cutting efforts and industry consolidation could boost Watson shares by as much as 50 percent. "Our recommendation of Watson comes as the generic drug industry is poised for consolidation that will boost share prices," Raymond James told clients, naming Teva Pharmaceutical and Novartis as likely buyers. Other generics the firm thinks could garner takeover interest include Andrx
ADRX
up almost 3 percent, and Mylan Laboratories
MYL, -0.76%
rising nearly 3 percent.

Decliners

Bakers Footwear Group
BKRS
shares lost 14.8 percent after the company said it expects third-quarter same-store sales to fall in the mid-to-high single digits and said it is no longer comfortable with analysts' full-year forecasts. Two analysts polled by Thomson First Call are currently looking for a per-share profit of 61 cents for fiscal 2004. The footwear retailer said sales for the quarter ending Oct. 3 have been hurt by a softer-than-expected demand in traditional back-to-school merchandise.

Lawson Software
LWSN
shares slumped 12.6 percent after the company warned fiscal first-quarter results could fall short of current Wall Street estimates, in part because it said customers are taking longer to make purchasing decisions and are deferring contracts. See full story.

Mentor
MNT, +1.03%
shares slumped 5.4 percent after the company was downgraded to "neutral" from "buy" by SunTrust Robinson Humphrey, with the broker citing concerns for breast implant and penile implant sales growth. "We believe the company's recent price increase implemented on Sept. 1 has not been well received by physicians," the broker said.

Shares of Multimedia Games
MGAM, -0.29%
tumbled 11.1 percent after Prudential Equity Group expressed concern that there is a "high likelihood" the company could fall short of fourth-quarter financial expectations due to construction delays at a number of development facilities. The firm lowered its estimates for the gaming equipment company to a profit of 33 cents per share in the fourth quarter, below Multimedia's own projection for earnings of 37 to 42 cents per share in the period. Prudential sees the problem as a timing issue following its visit to certain tribal casinos and construction sites in Oklahoma, which revealed the apparent delays at three sites that could prevent the company from meeting its goal of 2,500 gross unit installations in the quarter. The firm told clients: "each day the placements are delayed is a day the units don't earn revenue" but left its "overweight" rating on the stock intact.

Netopia
NTPAE
shares plunged 31.3 percent. The company plans to restate its accounts and its auditor, KPMG, has resigned. See full story.

Nortel Networks
NT
shares fell 5 percent after the company warned that third-quarter revenue would fall short of expectations. See full story.

Swift Transportation
SWFT
shares slumped 10.9 percent after the company forecast third-quarter profit of 26 cents a share to 31 cents a share, excluding items. Analysts currently expect a profit of 40 cents a share. Swift blamed the forecast on "the spread between fuel cost increases and fuel surcharge recovery." The company also said it has adopted a new share repurchase program, under which it may buy up to $150 million of its common stock over the next several months. See full story.

Shares of Trident Microsystems:
TRID
dropped 20.3 percent after C.E. Unterberg, Towbin lowered its rating on the company to "market perform" from "buy," saying it would remain on the sidelines until there's further clarity on Trident's capital structure and a better indication of what it can expect in the December quarter. The firm believes "visibility into continued growth in December currently remains low and will ultimately depend upon the end market demand for advanced TVs." It also took issue with the company's plans to explore a possible initial public offering of its TTI unit in Taiwan, saying this move would dilute the interests of U.S. shareholders in Trident's core TV business. See full story.

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